PVR Ltd, the country's largest multiplex chain operator, has agreed to buy back private equity firm L Capital's entire investment in equity and preference shares of PVR Leisure, a mall entertainment and gaming arena firm for an undisclosed amount.
L Capital, a private equity firm backed by global luxury conglomerate LVMH group, had originally invested Rs 107.7 crore (just under $20 million then) in PVR (Rs 57.7 crore) and PVR Leisure (Rs 50 crore) through a preferential issue in 2012.
This was its first investment outside the apparel business in India and first private investment in public equities (PIPE). It had earlier invested in Genesis Luxury and Fabindia in the country.
Later in the same year it invested Rs 82.3 crore more in the listed parent PVR. It had co-invested with Multiples PE which was roped in when PVR acquired Cinemax.
PVR Leisure houses mall entertainment, gaming arena, food courts and other leisure entertainment formats. PVR's investment in PVR bluO Entertainment Limited is also through PVR Leisure. PVR bluO, which operates bowling centres, is a 51:49 joint venture between PVR and Major Cineplex Group of Thailand.
It is not clear if L Capital also intends to exit PVR. L Capital holds 15 per cent stake in the listed firm which is currently worth Rs 425 crore ($68 million) and it is sitting on over 3x in unrealised gains.
Separate emailed queries sent to PVR Ltd and L Capital, seeking further details on the proposed transaction did not elicit any response immediately.
Earlier, Multiples PE has part-exited from its under two-year-old investment in PVR with healthy gains.
As on date, PVR owns 462 screens at 104 locations across 44 cities. It leads an industry which is fast seeing major consolidation through M&As between the handful of large firms.
Other key players include Inox (snapped Satyam), Carnival-Big Cinemas (in the process of merger) and Cinepolis (acquired Fun Cinemas).
Meanwhile, PVR posted a consolidated net profit of Rs 31.6 crore in the quarter ended December 31, 2014, an increase of 127.2 per cent year-on-year, driven by strong revenue and operational growth. Its total income grew to Rs 421.18 crore from Rs 338.7 crore in the year-ago period.
(Edited by Joby Puthuparampil Johnson)